BHP's Australian Coal Exploration License Ruled Valid by Appeals Court

BHP Billiton Ltd.’s right to explore for coal in the Liverpool Plains, a farming region in the Hunter Valley in Australia’s New South Wales state, was ruled valid by an appeals court panel.

New South Wales Supreme Court of Appeal Judge Murray Tobias, writing on behalf of a three-member panel, today upheld a Land and Environment Court ruling that said BHP’s coal-exploration license was legal.

BHP, based in Melbourne, bought a five-year exploration license from the New South Wales government for A$123 million ($122 million) in 2006. The Caroona Coal Action Group, a community organization opposed to mining over concerns it will damage underground water systems, challenged the validity of the license.

“We’re looking at our options,” Tim Duddy, a spokesman for Caroona Coal, said today after the ruling was released. “We’re not engaging in frivolous litigation.”

The mineral industry is the state’s biggest export industry, accounting for 39 percent of all exports in the fiscal year ended in 2007, according to a government report.

The case is Caroona Coal Action Group Inc. v. Coal Mines Australia Ltd. NSWCA 353. New South Wales Court of Appeal (Sydney).

To contact the reporter on this story: Joe Schneider in Sydney at jschneider5@bloomberg.net

To contact the editor responsible for this story: Iain Wilson at iwilson2@bloomberg.net

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